Apple, Adobe, Microsoft: Thieves to answer to Australian Federal Enquiry

Some rights reserved by pcfishhk, Flickr http://www.flickr.com/photos/pcfishhk/4603201622/sizes/z/in/photostream/

Some rights reserved by pcfishhk, Flickr 

You know how songs on iTunes in the US are 99c? Well in Australia they’re $1.69. That’s seventy cents extra for the same file, stored in the same data centre, sent at the speed of light across cables that have nothing to do with how Apple operates.

Now, considering that $1 Australian dollar currently buys 103 US cents, does Apple’s 70% price mark-up for a download seem fair to you?

Adobe’s Creative Suite Master 6 Collection (Photoshop, Illustrator, the works) in Australia costs a mind-boggling AUD$4,334.

The same software in the US costs $2599 , Gizmodo Australia reminded us today. That’s a price difference of AUD$1,811, or nearly 72% more expensive for Australians to download or purchase the same software package. It is actually cheaper to buy return plane tickets to the US than it is to purchase Adobe’s arrogantly priced, monopolistic (antitrust) software.

As Gizmodo said today:

Almost $2000 difference on a piece of software distributed through an online store. It’s still cheaper to fly from here in Sydney to Los Angeles, buy it there, and come home. By doing that I’d save $601, and I’d get Virgin Australia frequent flyer points, too.

None of this is really news to consumers here, as we have long lamented the fact we’re getting ripped off without explanation by overseas firms, powerless in spite of our cries of frustration.

The reason it’s making headlines now is because finally, even our Federal Government has had enough.

Here’s what Kotaku Australia reported a couple of days ago:

Major offenders Apple, Microsoft and Adobe have been reluctant to speak to the Committee handling [the IT pricing inquiry in Australia] to explain themselves.

As a result of this all three companies have now been summonsed to speak at a public hearing on March 22 in Canberra (the capital city of Australia and home of the Australian Federal Parliament) to answer questions regarding the increased pricing of its technology in Australia.

In short: this means that if all three companies do not send representatives to the hearing there will be direct legal consequences.

Ed Husic, IT pricing’s Harvey Dent, welcomed the move but claimed its one they government shouldn’t have been forced to make.

“These firms should have cooperated and been prepared to be more open and transparent about their pricing approaches,” he said.

“In what’s probably the first time anywhere in the world, these IT firms are now being summonsed by the Australian Parliament to explain why they price their products so much higher in Australia compared to the US.

As a result of this subpoena, Adobe almost immediately dropped annual subscription pricing for its Creative Cloud suite from $62.99 to $49.99 per month in Australia. Casual subscription pricing also dropped, from $94.99 to $74.99 per month in Australia. But they didn’t touch their golden eggs, the Creative Suite packages. They truly do think Australians must be overpaid morons who will forever sit back and say “she’ll be right, mate”.

Apple’s iPhone 5 costs AUD $799 for the lowest memory model, while it’s insultingly advertised on Apple’s global website as $199 for the same model, unlocked and contract-free in the US. That’s $600 more expensive, or a jaw-dropping 300% markup. ie: For every iPhone sold in Australia, Apple makes the money of three sales back home.

So what’s all this then? Justified costs of shipping and marketing in the land down-under? Or is my theory more likely: that overseas pricing is inflated astronomically to help subsidize the price for their crucial Star-Spangled Banner home market?

I really applaud the Federal Government’s move, especially that the date they must answer and provide evidence is so soon: March 23rd is just over one month away and hardly gives these bastards enough time to put together a cohesive legal strategy… oh who am I kidding, they’re no doubt all armed to the teeth ready for a fight. Still, we are all wishing the summons date was sprung on them even sooner.

I’m sure we’re going to hear rubbish like “the cost of servers” and “marketing strategies in Australia” justify the exorbitant percentage increases, so here’s hoping the Federal Government has already done it’s homework and employed some network professionals of their own to rebut any of the tech jargon the IT giants are prone to spewing forth like Pokemon to stun their opponents.

I don’t think it should end there, either. I won’t be happy until a class action is mounted by Maurice Blackburn, Australia’s largest legal firm, or similar, just like they have done successfully against the great telecommunications companies and just like they are doing against the great four banks, demanding compensation and payback for unfair fees and penalties across those industries.

IT companies, your golden days here are numbered.

Sources:

  • Apple, Microsoft Summonsed To Explain Australian Price Disparity | Kotaku Australia
  • Don’t Believe The Adobe Price Cut Hype, It’s Still Gouging You Silly | Gizmodo Australia

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Categories: Business, Crime, Politics, Law

Author:Andrew Beato

CEO, Chief Editor and founder of Intentious. Passionate comment enthusiast, amateur philosopher, Quora contributor, audiobook and general knowledge addict.

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3 Comments on “Apple, Adobe, Microsoft: Thieves to answer to Australian Federal Enquiry”

  1. February 14, 2013 at 5:33 am #

    While I share your disgust with corporate culture in general, I must part with you on two points.

    1) In the United States, of the 3 major nationwide carriers – AT&T, Verizon, and Sprint – only AT&T is a GSM carrier, and thus is the only one of the three that can activate an unlocked phone. Irregardless of the system technology, though, in the United States’ cell phone market, unlike most of the rest of the world, cellular carriers can mandate that the phones they sell be configured for their network only, reducing the opportunities consumers have to use the phone of their choice with the carrier of their choice. In fact, in late January, the U.S. Congress passed legislation effectively making the use of cell phones unlocked without prior authorization of the carrier illegal in the United States. Here’s a link if you’re interested: http://www.ibtimes.com/unlocking-cell-phones-will-be-illegal-us-starting-saturday-1039360.

    So, in the United States, even if you buy a brand new unlocked cell phone, you can only use it on one major carrier’s network, or that of lesser GSM carriers, like T-Mobile, whose network coverage in the United States is spotty at best.

    While it is true that on Apple’s U.S. website, to which you are directed (if you are in the United States) from the global site when you click the “buy now” link on the Iphone page, you can buy an unlocked Iphone. But the verbiage underneath “from $199*” doesn’t say “unlocked and contract-free,” Rather, it says “also available unlocked and contract-free.”

    But not for $199. If you follow the asterisk to the fine print at the bottom of the page, you see that the $199 price point clearly locks you into a carrier and their contract. If you continue to click toward a purchase, you are given a choice of carriers for that $199 phone, and if you click below those to choose the unlocked version instead, the least expensive choice suddenly goes from $199 to $649.

    Accounting for your stated 3% difference in the Australian dollar’s favor, that would make the U.S. price the equivalent of 630 AUD, which shrinks the disparity between the respective prices in the United States and Australia from 300% to a mere 21%. That disparity is a lot easier to legally justify by the factors you mentioned as “rubbish.” Mind you, they may be. But the legal argument is easier to make in light of the above, at least in the case of the Iphone. And considering that you can actually use said phone, I assume, on any variety of premium networks in Australia at will, both in reality and legally, I’d say you’ve got the better deal Down Under. A 21% premium is a relatively small price to pay for that freedom.

    2) I have a fundamental disagreement with a central national government, especially in the irresponsible way that most of them handle their own financial affairs, dictating to private enterprises how they should make and spend their money. In the United States, for instance, the idea of a government, multiple trillions of dollars (and climbing) in debt, telling the healthcare industry what and how it can charge for its services in an already heavily government-regulated environment, is preposterous, to say the least. And yet that’s where we are.

    That approach typically exacerbates and multiplies the challenges of a given economic sector, and then makes the challenges intractable by introducing an unaccountable party into the equation, which is what the government becomes when those least responsible for production are steadily bequeathed more and more of the reward for it. The cell phone industry would be no exception to that guaranteed outcome. Protracted inequities in any economic system can invariably be traced to government regulation of it. This would include the U.S. healthcare system.

    The only effective way to curb corporate abuse is to free corporations, not only from government regulation, but also from government favor, and then let consumer choice take over. Tired of being screwed by Adobe, Apple, and Microsoft? Stop giving them money. I did. Linux is a beautiful thing, man.

    Due to the cycle of market forces and corporate inclinations constantly reacting to each other, Microsoft and Adobe have been feeling the inevitability of their decline for years. Bank on it; Apple is next, and for the same reason: that false security of invincibility. Apple’s day of reckoning is coming, and soon. I can already see it on the horizon. And not a single government regulation can be blamed for it. Like most of us, Apple is digging its own grave, doing so with the steam shovel of arrogance. Ten years from now, Apple will be the Dell of today.

    • February 14, 2013 at 9:08 am #

      Brian, two very solid points made. Thank you. I didn’t even know about that law passed two weeks ago in the US that makes selling unlocked cellphones illegal. “That’s crazy!” I think. Then I understand why that’d be feeding a monopoly in the US. The whole system needs to change IMO, so that the consumer is not further punished. So yes, I bow out on the mobile phone point to your extensive local US knowledge on the cellular market situation. On point two, I see the gov here representing the voice of the consumers who are otherwise powerless. I can’t agree with you that gov’s should stay out of corporations where consumers think something unfair is going on, or where it’s damaging an industry. I think “if only they did this to the petrol duopoly here!” As for Apple, I still see incredible potential in their upcoming iPanel, it could accellerate the transformation in the way people buy downloadable TV, hardcore games and movies across Europe, Australasia, US… Risky, but they have a chance to do it right, where Samsung have frantically already tried and failed. Could open up yet another huge market. There’s also always going to be chances for giant leaps in phone/tablet hardware… such as weeks of battery life the competition can’t duplicate, or a completely re-designed iOS’X’ that brings ppl lost to Android back in droves. But that’s a whole ‘nother discussion for another article.

  2. February 14, 2013 at 11:39 am #

    Thanks. Just to be clear, the new law doesn’t bar the sale of unlocked phones, but rather the unlocking of carrier-centric phones without the issuing carrier’s prior permission. New unlocked phones can still be bought legally, but they are incompatible for activation with most cellular carriers in the United States.

    Thanks for mentioning the iPanel thing. Hadn’t heard about that. Nonetheless, my bet is placed. I’ll continue to look for your juicy Apple updates on Intentious.

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